Tokyo Market: Exporters cheered by moves to curb yen

STOCKS may rise this week if the government indicates that Japan and other countries will intervene in the currency market to stem the yen's rise, which threatens exporters' earnings.

The yen plunged after finance minister Kiichi Miyazawa said that Japan had been discussing its currency's recent rise with the Group of Seven industrialised nations. The move helped the benchmark Nikkei 225 index to reverse earlier losses.

"The implications of currency moves cannot be ignored," said Paul Migliorato at Commerz Securities. "A lot of people are interested in buying blue chips, but only if the currency stabilises and doesn't show signs of going to 100."

The Nikkei 225 fluctuated last week from a high of 17,988.59 to a low of 17,058.13, finishing on Friday at 17,342.27 - a 2 per cent decline in the week. The Jasdaq over-the-counter market slumped 8.4 per cent in three days, ending a 16-day, 25.3 per cent rally.

The yen rose as much as 1.94 per cent in the week to 103.2 to the dollar, a 40-month high against the US currency. The yen recently traded at 106.76, close to where it was at the beginning of the week.

There has been speculation that the US has asked Japan to increase its money supply through lower short-term interest rates before it co-operates with Japan to weaken the yen. "The direct impact of an intervention on bonds isn't straightforward, said Takeshi Naito, economist at Daiwa Securities. "A weaker yen is bad for Japanese government bonds, but the central bank may be forced to pump more funds into the banking system, which ultimately could be good for bonds." Last week the benchmark 10-year government bond yield fell nine basis points to 1.705 per cent.

Expectations that other nations may help Japan stem the rising yen helped reverse losses on Friday by the Nikkei, which ended the day up for the first time in three days, boosted by gains in Canon and other exporters.

Mr Miyazawa may discuss intervention at the G7 meeting, which begins on 25 September. Japan's deputy finance minister for international affairs, Haruhiko Kuroda, flew to Washington on Thursday to meet US Treasury officials.

"The actions by Kuroda and comments by Miyazawa have increased the likelihood of concerted intervention in the foreign exchange markets," said Hiromasa Hirai at Ikeda Investment Management.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones